Coronavirus information for homeowners and renters

Financial impact of the pandemic and support available to stay in your home

With the coronavirus pandemic affecting not just the nation’s health but our incomes, many people are concerned about how they’ll keep up with monthly costs like rent and mortgage payments. Whether you’re a homeowner or renter, we have some information that may help.

Housing situation

People all over the UK have seen their income hit by the coronavirus pandemic, and both renters and homeowners have been affected.

A YouGov poll for Shelter suggests that over 200,000 private renters have fallen behind on their rent since the start of the pandemic [1]. A far larger number – over 30% – have experienced increased feelings of depression and anxiety related to their housing situation.

It’s thought that around 20% of mortgage holders have applied for help with their repayments.  Since March 2020, most mortgage providers have been allowing homeowners to arrange mortgage payment holidays – temporary breaks from repayments – if they’re struggling financially.

Payment holidays, if granted, last for three months. Usually, you’ll make no payments during this time but, in some cases, you can arrange to make partial payments. After three months you can apply to extend for another three months.

Missed payments

In the future, you’ll need to make up your missed payments by adding them to the end of your mortgage period or increasing your monthly repayments.  Almost all payment holiday requests are granted, but your mortgage provider can deny your request if they think that the additional interest you accumulate will make you unable to afford future repayments.

They may be able to offer alternative support, in the form of an interest freeze or a change to your repayment plan. Additionally, repossessions are currently on hold until 31 October 2020. You can apply for a mortgage payment holiday until 31 October 2020.

Tenants in England and Wales are currently protected from eviction during the pandemic.  This temporary ban on evictions is in place until 23 August 2020. In Scotland, new rules have been introduced that require landlords to give notice of eviction up to six months in advance.  This gives tenants longer to arrange their debts, apply for benefits, and plan their next move. Northern Ireland has a similar bill, requiring a 12-week notice period.

However, none of this legislation directly helps renters to catch up on their rent arrears. The current advice is to speak to your landlord about a rent reduction or late payment plan. Like other homeowners, landlords are able to apply for a mortgage payment holiday.

Other support

If you’re struggling to make your rent payments, and your landlord is unable to help, make sure that you’re claiming all of the benefits that you’re entitled to.

Universal Credit is a means-tested benefit available to people who are unemployed, have been made redundant, are on a low income, or are unable to work due to sickness. The standard allowance has been increased because of the pandemic, to help renters who are struggling to meet their payment schedule.

While Universal Credit is available to self-employed people, they may also be entitled to grants through the self-employment income support scheme. HM Revenue & Customs has contacted those who are eligible.

Statutory sick pay or employment and support allowance may be available to people who have been categorised by the NHS as ‘extremely vulnerable’ and advised to shield.

Source data:

[1] https://england.shelter.org.uk/media/press_releases/articles/230,000_renters_at_risk_of_covid-eviction_when_the_government_ban_lifts

All Rights Reserved. Information contained in this article and on our website does not constitute advice and is provided for information purposes only. Recipients should not act upon it, but should seek professional advice relevant to their own situation.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.